This, he said, would address the problems created by too many people leaving school without an adequate level of literacy or numeracy.

Announcing the contents of the Skills White Paper, Mr Clarke vowed to lift the maximinum age for starting a Modern Apprenticeship from 25.

'Mismatch'

Digby Jones, director general of the CBI, urged the government to "turn paper promises into practical realities"

He said: "Charles Clarke is right to recognise the role of employers and is giving them a greater say in the content and delivery of training programmes.

"For too long there has been a mismatch between the needs of employers and the services of training providers."

But Mr Jones added: "There is still too much centralisation in the way budgets are allocated."

The government said it would also provide free tuition for A-level or equivalent courses on a regional "shortage" basis.

If businesses in an area needed certain skills, only the over-19s taking relevant subjects would receive funding.

The north-east of England has 400,000 adults with literacy and numeracy skills below those needed to cope with most jobs.

Vicky Young, who runs Posithread UK, a manufacturing company in Washington, Tyne and Wear, has stopped taking part in the Modern Apprenticeship scheme.

Instead she has started employing older workers, because of their superior skills.

Mrs Young said: "I believe it is right to train people for skills that are relevant in the area where they live.

"But the big mistake was getting rid of apprenticeships 18 years ago. The government is never going to get that level of training back, even with the Modern Apprenticeships it has introduced.

"Encouraging people to stay on to A-level is no good at all. Also, most of the training providers are ex-civil servants or consultants who have never worked in industry."

France and Germany have double the UK's proportion of workers trained to technician or skilled craft level.

Engineering Employers' Federation director general Martin Temple said: "The measures contained in the new skills strategy could provide a major boost for vocational skills in the UK.

"We welcome the new funding and entitlements for adults undertaking vocational qualifications.

"However, while the removal of age thresholds for Modern Apprenticeships is a crucial step to addressing the shortage of skilled technicians, it must be backed by sufficient resources to allow employers and employees the chance to take advantage of it."